simple words, simple advice

I was thinking about this today and it just hit me. I'm sure most of you have figured this out, but I thought this would be a particularly effective and simple way of saying it:

"You shouldn't think of your credit card statement as a bill."

Simple and to the point. It's just another way of saying that you should pay off your credit card bill at the end of the month but the mentality behind it is what counts the most -- money that you put on your credit card should be treated NO differently than cash in your pocket. The only difference is that instead of having to fumble for a check or a paper money every time you make a purchase, you conveniently pay it all off a little under a month after making the purchase.

That is, credit cards should be a convenience and nothing more. It should be used for ONLY, I repeat, ONLY, the following four things.

1) It's easier to carry, there's no need to bother writing checks or using cash, and you usually get added purchase protections.
2) A simple, itemized statement of your expenses to make your checkbook balancing easier.
3) Rewards that give you EXTRA money so you can buy things you like.
4) An extremely serious medical/lifestyle emergency -- and ONLY if you have a single-digit APR and do not own a home (so that the equity loan option isn't available to you).

That's all. I would bet that the great majority of troubles with credit cards take place when people think of their credit cards as being able to do more than the above things. An extension of these rules is that you should never pay for a cent of interest.

Preaching to the choir, I'm sure, but I guess it doesn't hurt to say this from time to time. And I'm not trying to lecture anyone either, it's just that it took me a long time to realize this myself and maybe saying it clearly will help someone. I sure wish I'd heard that a few years back.

That is *exactly* the way I treat my one and only card. If I can't pay for it in cash, or if I wont be able to pay it off at the time of statement, I simply don't need it that bad. I used it last month to pay for my sons doctor visit (75 bucks). At the time it had a zero balance. I walked out of there thinking that is one of the few things CC's should be used for.

Originally posted by klingsor I was thinking about this today and it just hit me. I'm sure most of you have figured this out, but I thought this would be a particularly effective and simple way of saying it:

"You shouldn't think of your credit card statement as a bill."

Simple and to the point. It's just another way of saying that you should pay off your credit card bill at the end of the month but the mentality behind it is what counts the most -- money that you put on your credit card should be treated NO differently than cash in your pocket. The only difference is that instead of having to fumble for a check or a paper money every time you make a purchase, you conveniently pay it all off a little under a month after making the purchase.

That is, credit cards should be a convenience and nothing more. It should be used for ONLY, I repeat, ONLY, the following four things.

1) It's easier to carry, there's no need to bother writing checks or using cash, and you usually get added purchase protections.
2) A simple, itemized statement of your expenses to make your checkbook balancing easier.
3) Rewards that give you EXTRA money so you can buy things you like.
4) An extremely serious medical/lifestyle emergency -- and ONLY if you have a single-digit APR and do not own a home (so that the equity loan option isn't available to you).

That's all. I would bet that the great majority of troubles with credit cards take place when people think of their credit cards as being able to do more than the above things. An extension of these rules is that you should never pay for a cent of interest.

Preaching to the choir, I'm sure, but I guess it doesn't hurt to say this from time to time. And I'm not trying to lecture anyone either, it's just that it took me a long time to realize this myself and maybe saying it clearly will help someone. I sure wish I'd heard that a few years back.

Please comment.

Click to expand...

I NEVER PAY MORE THAN 9.99% INTEREST

I USE CREDIT CARDS 99+% OF THE TIME

My highest I pay today is 7.99% (PAYING OFF A.S.A.P.)

Next to go is 5.90%

MILEAGE CARDS ARE USED FOR ALMOST 100% OF THE PURCHASES

PAID IN FULL EVERY SINGLE MONTH...(I EVEN PAY PART OF THE NEXT MONTH CHARGES BEFORE THE STATEMENT IS CUT)

I use credit cards for MY BENEFIT!!!

I write about 50 checks a year...that is all!!! I do use ON-LINE PAYMENTS IF AVAILABLE...